Pilgrim’s Pride reports double-digit export growth

The first half of 2020 has been a productive one for Pilgrim’s Pride in terms of exports, as the company through the first two quarters saw its export volumes grow 12% and export revenues grow 15%.

Roy Graber Headshot
(Nikolai Zotov | Bigstock)
(Nikolai Zotov | Bigstock)

The first half of 2020 has been a productive one for Pilgrim’s Pride in terms of exports, as the company through the first two quarters saw its export volumes grow 12% and export revenues grow 15%.

Speaking during a quarterly conference call on July 30, Fabio Sandri, interim president and CEO of Pilgrim’s Pride, addressed some of the trade trends the company is experiencing.

Pilgrim’s Pride is the second largest poultry company in the United States, but the company also operates in Mexico and Europe.

Exports to China

As expected, China has been a major contributor to that export growth, after the country in November 2019 lifted its ban on poultry products from the United States, which had been in place since 2015. Sandri reported that overall inventories were down during the second quarter, which ended June 28, due to strong trade.

“The inventory reduction is mostly driven by the acceleration of exports to China, which are up 157 million tons year-to-date in May, with more shipments occurring in April and May. Year-to-date, China is the second-largest destination of U.S. broiler exports, behind Mexico,” Sandri said.

Sandri added that in May, China was the No. 1 destination for poultry exports from the U.S.

Also helping Pilgrim’s Pride with its reach to China is the integration of U.K. meat company Tulip Limited, which Pilgrim’s acquired in October 2019.

“We have now doubled the proportion of exports to China as a total of our sales, which we expect to drive the strength of our overall exports in the near future. All of our European fresh pork facilities are approved for China. So we are well positioned to benefit from export opportunities,” he said.

Other markets

Sandri also reported a strong uptick in exports to southeast Asia, driven largely by a growth of demand for protein amid the African swine fever (ASF) outbreak.

“In addition to the Chinese market opening, the Philippines, Vietnam and Taiwan markets grew by 45%, 19% and 9%, respectively,” he said.

“During the quarter, we added six new destinations to our country mix, and year-to-date, we have added 67 new importers to our client base as we continue to further broaden and diversify our relationships. While we expect China to continue to be a significant growth driver, we also saw growth from southeast Asia, outside of Hong Kong and China, the Middle East, the Caribbean and Latin America, as well as Africa. We remain positive as we have demonstrated resilience and position ourselves to return value regardless of market conditions.”

Financial results

Pilgrim’s Pride reported net sales of $2.82 billion for the second quarter, a year-over-year decline of 0.7%. After recording a net income attributable to Pilgrim’s Pride of $170.1 million in the second quarter of 2019, the company experienced a net loss of $6.04 million during the most recent quarter.

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